India’s solar industry has entered a defining phase. Over the past few years, the country has focused on developing a robust domestic manufacturing ecosystem through initiatives such as the Approved List of Models and Manufacturers (ALMM). The objective has always been clear: reduce import dependency, strengthen supply chain resilience, improve product quality, and accelerate the vision of an Atmanirbhar renewable energy ecosystem.
However, building a globally competitive manufacturing ecosystem requires more than ambitious policy announcements. It also demands practical implementation timelines that balance industry readiness with national goals.
The Ministry of New and Renewable Energy’s (MNRE) recent decision to extend the ALMM List-II exemption for net metering and open access projects until December 31, 2026, reflects exactly that balance. Rather than diluting India’s manufacturing ambitions, the extension provides the industry with much-needed operational flexibility while ensuring the long-term vision remains intact.
The extension offers the “breathing room” the industry needed, preventing immediate supply chain bottlenecks while allowing domestic solar cell manufacturers to scale production responsibly.
Understanding the MNRE ALMM-II Extension
ALMM basically represents the quality check and domestic content requirements of the solar sector in the country.
Solar projects under ALMM List-I must use modules produced by the manufacturers listed in the approved models.
Solar cell products have become part of this system with ALMM List-II thus expanding and enhancing the domestic manufacturing supply chain.
The latest MNRE ALMM extension solar cells policy allows net metering and open access renewable energy projects to continue commissioning without mandatory ALMM List-II compliance until December 31, 2026. This limited extension does not change the government’s long-term commitment to domestic manufacturing but provides developers and manufacturers with additional time to transition smoothly.
Instead of creating disruption, the policy aims to maintain project momentum while domestic manufacturing capacity catches up with growing market demand.
The Lesson from ALMM List-I: Capacity Matters as Much as Policy
The country has witnessed the effects of supply-side bottlenecks while rolling out ALMM List-I.
Although domestic manufacturing received a boost after the policy was introduced, the narrow list of vendors who produced solar modules was unable to cope with the sudden surge in demand, resulting in a supply-demand gap.
Simarpreet Singh regards this experience as a valuable lesson for the industry.
In his words:
“Our experience with ALMM List-I showed that a limited approved-vendor base creates demand-supply asymmetries at scale. Companies at both ends of the value chain face procurement pressure. The fallout leads to multi-week delays of projects.”
However, the extension of the ALMM List-II exemption until December 2026 gives net metering and open access projects the breathing room they needed.
As Simarpreet Singh further added:
“The six months to implementation provide an adequate runway, provided enlisted cell capacity ramps up as projected and pricing stabilises through competition among approved manufacturers. The policy direction is right; execution discipline on both sides will eventually decide the outcome.”
In a few situations the delays in component availability from the manufacturers will cause the commissioning of the project to be postponed. The developers end up having to bear higher financing costs and the consumers also lose out on the energy saving.
However, this extension proves these objectives can be pursued simultaneously while still ensuring India’s manufacturing ambitions are not compromised by the current operational reality.
Why the Industry Needed This “Breathing Room”
“Breathing room” is a very accurate description of the relief the sector was eagerly hoping for. India’s solar demand keeps rising all across the three key areas viz. rooftop, commercial & industrial (C&I), and open access.
On the other hand, domestic solar cell production has seen an increase but still faces some difficulties during transition.
Not being able to get the exemption from using solar cells with imported materials would have caused the developers to run against problems such as:
- Very few solar cells compliant with the use of domestically sourced materials
- Higher procurement costs due to less supply
- Longer durations to commission the projects
- Increase in working capital requirements
- Delays in financing and loan disbursements
By postponing mandatory compliance for eligible projects, the government has helped maintain installation momentum while reducing unnecessary supply chain stress.
Industry experts estimate that this decision could enable nearly 10 GW of solar connected to the grid by allowing pending projects to move toward commissioning without additional procurement bottlenecks.
This is particularly significant because project execution delays affect not only developers but also industrial consumers waiting to reduce electricity costs through renewable energy adoption.
A Six-Month Runway for Domestic Manufacturers
One of the biggest advantages of the extension is the additional time it provides domestic manufacturers.
Beyond merely erecting factories to produce solar cells, achieving a competitive level of solar cell manufacturing capacity is a very multifaceted endeavor. The manufacturer has at minimum to:
- Bring production to new heights
- Optimize the manufacturing process to have the quality consistent
- Certification process completion
- Catching rate of yield improvement
- Making of supply chain relationships
- Increase in logistics
Building such capacity takes time. Industry experts believe the six-month extension is sufficient if production expands as planned. Rather than delaying localization, the MNRE ALMM solar cell policy provides a practical transition period that supports manufacturing growth while ensuring uninterrupted renewable energy deployment.
Healthy Competition Will Help Stabilize Pricing
The other benefit of extending the period is that it is likely to stabilize prices as a matter of fact. Whenever there are shortages of supply while demand is high, prices naturally rise. In the case of solar, the price of the components will go up, and this will affect the following parties:
- EPC contractors
- Project developers
- Commercial consumers
- Industrial customers
- Financial Institutions
Allowing additional time for more manufacturers to enter the approved vendor ecosystem increases competition.
- Greater availability
- Faster shipping dates
- Lower procurement risk
- Competitive pricing
- More product innovation
The extension encourages a more balanced and stable supply/demand market structure that distributes demand among multiple suppliers, rather than the scenario where demand is concentrated in a couple of suppliers.
As more companies become certified by ALMM, pricing, through market competition instead of supply shortages, is expected to gradually reach a stable state and level.
Supporting India’s Manufacturing Vision Without Slowing Solar Growth
A few people who look at policies and are also called policy observers may sometimes see domestic manufacturers and rapid solar installation as conflicting goals. Yet the above is evidence that not only can both goals be reached without interference but it may even be a plus for the manufacturing sector if growth is also a factor while solar project development is underway.
Both of these aims, in fact, have to work hand in hand. Without increasing the pace of project installations India will not be able to meet its renewables target.
A similar approach for domestic energy is only possible, with a strong domestic industrial ecosystem that will support it over time. ALMM-II extension shows that the sequence of policies has to be taken into account.
While the government is implementing a staged approach, it has made a choice not to make the regulations too severe immediately before manufacturing capacity has been brought to the required levels.
Investor confidence is thus preserved and ongoing R&D and renewable energy investments are protected as a result.
Besides that, the extension is a demonstration that India is determined to:
- Self-sufficiency in manufacturing
- Resilience of supply chains
- Quality solar components
- Industrial activities that are environmentally sustainable
and all of that without creating unnecessary slowdowns in deployments.
What Developers Should Do During This Window
It is important to see the extension not as a license to delay further, but as an additional window of opportunity.
So developers can make better use of this window period to work on:
- Entering long-term contracts for the supply of solar energy
- Getting accurate sales forecasts
- Sourcing raw materials before project starts with a view to getting the best terms
- Becoming less dependent on the suppliers by getting more from the suppliers
- Being updated about the list of manufacturers from the ALMM.
The need for the sector to have an honest discussion about the current status of manufacturers and the time required to onboard ALMM-qualified manufacturers is also emphasized. Combined with accurate procurement planning, these measures can make the transition to full compliance almost seamless.
The Role of EPC Expertise in Regulatory Compliance
Policies like ALMM-II only serve to further demonstrate that the significance of having the knowledge of various laws has increased all across the solar energy industry in India.
Project engineering and commissioning are no longer the dominant aspects of solar deployment. At the same time, it is just as essential and even more complicated to get the procurement right, get approval, and comply with documentation requirements and rules & regulations of the Government.
Organizations offering Solar EPC compliance and regulatory advisory services play an increasingly valuable role by helping developers navigate evolving regulatory frameworks while minimizing execution risks.
As India continues strengthening domestic manufacturing requirements, proactive compliance planning will become just as important as technical project execution.
Building a Stronger Domestic Manufacturing Ecosystem
To say the least, the overall goal of the ALMM policy is the same.
This policy is to support the creation of an indigenous production of solar products such as modules, cells, wafers and the supply chains that support them, in India.
This expansion also supports adjacent industries involved in Power distribution products manufacturing, creating additional employment opportunities while strengthening the country’s renewable energy infrastructure.
Therefore the decision to roll out the policy should be considered as another stage in the transition.
With the help of a practical implementation sequence, manufacturers are given time to develop long term, stable, production facilities and they are not made to just react to the short-term demand surge.
Overview of Main Findings
The latest MNRE ALMM extension for solar cells is more than a simple deadline extension, it is a pragmatic policy adjustment that aligns manufacturing ambitions with market realities.
India’s experience with ALMM List-I highlighted how a limited pool of approved vendors can create demand-supply imbalances, procurement pressures, and project delays. Learning from that experience, the government has provided the industry with the breathing room needed to avoid repeating those challenges while preserving the long-term vision of self-reliance.
The six-month extension offers developers the flexibility to complete pending projects, supports the addition of 10 GW of solar capacity to the grid, allows manufacturers to scale production, and creates the conditions for healthier competition and more stable pricing.
Ultimately, India’s renewable energy transition depends not only on ambitious policies but also on thoughtful execution. At Hartek Group, we believe the ALMM-II extension reflects that philosophy by addressing immediate industry needs while keeping the country firmly on course toward a stronger, more competitive, and self-reliant solar manufacturing future.
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